NEW YORK (TheStreet) -- Shares of Urban Outfitters (URBN - Get Report) rose 1.72% to $40.27 in morning trading Monday after Jim Cramer was bullish on the stock on his Mad Money show on CNBC on Friday night.
Cramer said the company is firing on all cylinders and expects the retailer to report strong first-quarter results after the market close today.
"I was in Philly this weekend throwing out the first ball [at the Philadelphia Phillies game] so I had done a lot of work on Urban because the press asked me who is doing well, and I am very excited about their 2015 because of the turn in the flagship," Cramer said Monday morning. "But we will know more tonight."
The consensus estimate calls for Urban Outfitters to report earnings of 30 cents a share on revenue of $758.07 million, according to analysts polled by Thomson Reuters. In the first quarter last year, the retailer reported earnings of 26 cents a share, which just missed the consensus estimate of 27 cents a share. Revenue totaled $686.31 million, which beat analysts' expectations of $680.19 million.
In the fourth quarter last year, Urban Outfitters reported EPS of 60 cents, which surpassed the consensus estimate of 57 cents. Revenue totaled $1.011 billion, which beat analysts' expectations of $1.007 billion.
Separately, TheStreet Ratings team rates URBAN OUTFITTERS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate URBAN OUTFITTERS INC (URBN) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, increase in stock price during the past year and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 11.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- URBN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, URBAN OUTFITTERS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 38.02% is the gross profit margin for URBAN OUTFITTERS INC which we consider to be strong. Regardless of URBN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, URBN's net profit margin of 7.94% compares favorably to the industry average.
- You can view the full analysis from the report here: URBN Ratings Report